Ethereum followed closely, breaking above $2,000 and climbing nearly 6% within the same window, adding more than $20 billion in value.

XRP also joined the advance, trading around $1.41. In total, the broader crypto market added close to $100 billion in under an hour, triggering nearly $80 million in short liquidations during the surge.

So what’s behind the sudden rally?

Strong U.S. Economic Data Sparks Risk Appetite

One of the main drivers appears to be fresh macroeconomic data.

The U.S. ISM Manufacturing PMI came in at 52.4, beating expectations of 51.8. A reading above 50 signals expansion in the manufacturing sector.

For markets, that matters.

An expanding economy reduces immediate recession fears and often encourages investors to rotate back into risk assets. Crypto, which has shown a strong correlation with equities in recent months, reacted quickly to the upside surprise.

With risk sentiment improving, leveraged traders positioned for further downside were forced to cover.

A Massive Short Squeeze Accelerates the Move

As Bitcoin began pushing higher, short sellers were caught off guard. Roughly $80 million in short positions were liquidated within 45 minutes. Over 24 hours, total liquidations approached $128 million.

When short positions are forced to close, they effectively become market buy orders, which pushes prices even higher. That feedback loop created a sharp upward spike across major assets.

Bitcoin’s rapid 5% jump became the trigger that lifted the entire market.

Gold and Silver Plunge as Capital Rotates

At the same time, traditional safe-haven assets sold off aggressively.

Gold fell more than 2%, erasing an estimated $750 billion in market value, while silver dropped nearly 7%, wiping out about $370 billion.

The sharp decline in precious metals shows a rotation out of defensive positions. Crypto, which had been trading under pressure amid global tensions, appears to have benefited from that shift.

Recent data shows crypto moving inversely to gold, reinforcing the idea of capital rotation rather than isolated speculation.

Institutional Buying Adds Fuel

Beyond short liquidations, there are signs of continued institutional participation.

Strategy recently disclosed a $200 million Bitcoin purchase, reinforcing long-term conviction from corporate buyers. Large inflows like these provide underlying support during volatile sessions.

Where the Market Stands Now

The total crypto market capitalization climbed back toward $2.37 trillion, up more than 2% on the day. Despite the rebound, sentiment indicators still sit in “Extreme Fear” territory, suggesting positioning had been heavily defensive before the move.

Bitcoin now faces a critical test near the $69,000 level. Holding above $66,360 is seen as important for maintaining short-term structure.

The next major macro event is the Federal Reserve meeting on March 18. A dovish tone could extend momentum, while a hawkish stance may cool risk appetite again.
source: https://www.tradingview.com/news/coinpedia:e93c23321094b:0-why-are-bitcoin-ethereum-and-xrp-prices-rallying-today/